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Central Bank of Iceland-Results of foreign currency auctions

September 3, 2014

ENP Newswire - 03 September 2014

Release date- 02092014 - On 15 July 2014, the Central Bank of Iceland offered to purchase euros in exchange for Icelandic kronur for long-term investment in the Icelandic economy, or in exchange for payment in Treasury bond series RIKS 33 0321.

The Bank also advertised for bids on the sale of Icelandic kronur for cash payment in foreign currency. The two euro purchase auctions took place between 9:30 hrs. and 10:30 hrs. today and the krona purchase auction took place between 10:45 hrs. and 11:30 hrs. The auctions were an element in the removal of restrictions on movement of capital as set forth in the Central Bank's capital account liberalisation strategy, published on 25 March 2011. Further information can be found in the Central Bank of Iceland Terms of foreign exchange transactions according to the Investment Programme for capital account liberalisation, with subsequent amendments, dated 18 November 2011.

Results of foreign currency auctions (pdf)

No. 31/201


The underlying external position of the economy at the end of the second quarter of 2014

The Central Bank of Iceland has published on its website the preliminary statistics for the balance of payments in the second quarter of 2014, and for the external position at the end of the quarter.

For further information, the Bank has simultaneously published an analysis of the underlying net external position of the economy. The assessment entails an estimation of the position that will result when the domestic and foreign assets of the deposit money banks in winding-up proceedings have been sold and the proceeds distributed to creditors. The settlement of the estates of several non-financial domestic firms currently being wound up is included as well (for further explanation, see Special Publication no. 9: Iceland's underlying external position and balance of payments, published 18 March 2013).

The assessment of the assets of the deposit money banks (DMB) in winding-up proceedings is based on the book value of the assets according to winding-up committee estimates. The classification of creditors as domestic or foreign is based on underlying ownership of recognised claims according to claims registers. It should be noted that both the market value of the assets of the DMBs in winding-up proceedings and the proportional distribution of claims as domestic and foreign are highly uncertain. Factors such as the exchange rate used for settlement, the netting of debt, and the resolution of disputes on specific claims will ultimately determine the status of the estates and thereby the effect of their settlement on the external position of the economy.

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Source: ENP Newswire

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